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Strategic Restructuring:
Partnership Options for Nonprofits

La Piana Associates
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The Forms of Strategic Restructuring

Deciding to Restructure

Funding the Strategic Restructuring Process

The Negotiations Process

Due Diligence

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Integrating the New Organization

Leadership and Management

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Tips and Answers to Your Questions
Leadership and Management

Selecting an Executive Director Can Make Everyone Feel Like No One's In Charge

There comes a time in merger negotiations when board members and staff may feel like no one is in charge. This may happen when two boards, for instance, appoint a hiring committee to carry out the task of selecting an executive director for the merged entity. Boards may delegate this task to a committee when the sum of their memberships is too large or the task requires several meetings to take place in a short period of time.

Feelings that no one is in charge may appear when your hiring committee is taking too long to do its job, is not maintaining open communication with the boards or is unable to resolve conflicts that arise, letting too much time go by without action. In one case, the hiring committee of two merging organizations took almost three months to select and recommend an executive director to its boards when considering only the two incumbents as candidates: this is too long a period of time to carry out that task.

There is no rule of thumb about a reasonable amount of time to select a new executive director, and it would be foolish to rush what many consider to be the single most significant action a board will ever take. Nonetheless, you can approximate the time pressures by doing the following exercise: If you are a board member, put yourself in the shoes of a staff person, let’s say a program manager, and ask yourself: how quickly would I want to know who our new executive director will be? The answer, from your perspective as a manager, might be, "today" or "tomorrow." However, a more realistic time frame might be a month or two, if you need to set up an application and interview process, conduct deliberations, and arrive to a final decision between two incumbents.

The time frame to select a new executive director for a merged organization can take as little as an afternoon meeting, in the case of two executive directors who can work out the situation between themselves and to the satisfaction of the boards and, as long as four to six months, when you may need to set up an open process and wide search. Our best advise is to conduct a process that is comfortable for all involved. Committee and board members should feel that the process is neither rushing nor dragging in its duration.

We have a case in which one of the two merging agency executive directors wanted to fill the number one position after the merger and the other was more interested in a financial management position. They discussed this and agreed to present it to their negotiations committee. This committee liked the proposition and presented it to the boards which enthusiastically supported it. This took a total of three hours of discussion and one twenty-minute discussion at each board meeting.

The competitive process between the two executives may be structured as follows:

  1. When the committee meets for the first time, the members may ask the two executive directors if either one of them wants to lead the new entity. Both executive directors may want to be considered for the position.
  2. At the same meeting, the committee would set up an interview process and notify the two executive directors of the materials they need to submit to the group for consideration and the timeline to do this. The committee might give the executive directors ten working days to submit their documentation for consideration.
  3. Two weeks into the process, the committee’s second meeting takes place and the two executive directors are invited to interview at different times. After the interviews, the committee reviews both candidates, discusses pros and cons, and votes for a candidate. Most often, committees will try to reach consensus on this decision because it may leverage more support at the board level.
  4. After the second meeting, the committee members go back to their boards to present their unanimous recommendation and the boards are asked to vote. Usually, a committee’s unanimous recommendation should receive, at least, majority support from the boards. Less than unanimous support at this point may indicate problems with the way the committee was set up or with individuals or factions in the committee or board.

In our experience, board chairs have facilitated and led this process successfully. However, there may be other leaders on your board who volunteer or are appointed to do this. Just keep in mind that, however you decide to set up your hiring committee, the individuals leading and facilitating such committee are filling a temporary void left by the executive directors. Therefore, those leading and facilitating your hiring committee must be individuals who have demonstrated leadership abilities and the capacity to assist groups in similar situations.

Signs that your committee process might be taking too long or that there is dysfunction in the way the group is interacting include:

  1. No progress is made from meeting to meeting and agenda items seem to be same as last meeting’s;
  2. Staff and board members are describing different versions of "what’s really happening" in those committee meetings;
  3. Committee members are constantly "having" to go back to their board for consultation;
  4. There is persistent animosity between members of the different boards on the selection committee;
  5. Committee members are outwardly partial to "their" candidate, instead of committing to selecting the "best" candidate for the new organization;
  6. Committee members sabotage the committee process in odd and often quite inventive ways;
  7. Board members "demonize" each other when not in meetings and even during meetings